Crowd work: The rise of unstable work and potential measures to prevent the proliferation of the working poor　|ニッセイ基礎研究所

The current situation of crowd workers in Japan

Then how is the situation in Japan? Here's a limited edition of the paper, so I want to point out the current situation of freelance and crowd sourcing. First, according to “Survey on actual condition of freelance 2017,” there are 11,220,000 freelances in Japan, accounting for 17% of the whole workforce as of 2017—an increase of 5% compared to the survey conducted a year before. Types of freelance in Japan are classified into the following four categories:

(1) Side job-type freelance (those who work freelance as a supplement to full-time work)
(2) Multiple job-type freelance (those who work for multiple companies regardless of the employment system)
(3) Professional-type freelance (those who are independent professionals without specific workplaces)
(4) Self-employed-type freelance (those who are owners managing their own businesses)

There has been an especially large increase in the number of side job-type freelance—4.58 million in 2017, up from 4.16 million in 2016. The Japanese government is laying out a policy to support a full-time worker`s secondary job as part of the work-style reforms. Thus, the number of side job-type freelancers is expected to rise more and more. However, in Japan, many of the freelances are currently participating in the labor market with unstable earnings.

For example, the average annual income of "Self-employed-type freelance" with the highest income among freelances is 3.5 million yen, which is lower than employee's average salary of 4.2 million yen. Most of the freelances enter the labor market with unstable earnings,

Figure2 Distribution of annual income by freelance type in Japan

Now I want to explain about crowd sourcing in Japan. Crowd sourcing has been growing rapidly in Japan since 2012. Crowd sourcing companies rely on independent workers, such as SOHO workers. The use of crowd sourcing has been growing rapidly in Japan since 2012. Yano Research Institute Ltd. estimates that the scale of crowd sourcing in Japan will increase rapidly, from ¥4.4 billion yen 2011 to ¥135 billion yen in 2017, and finally reach ¥295 billion yen in 2020 (Figure 3).　

At the moment, the number of registered businesses operator who provide crowd sourcing in Japan has reached hundreds of thousands. According to the “2014 White Paper on Small and Medium Enterprises in Japan” by the Small and Medium Enterprises Agency, the rate of corporations with less than five full-time employees that have ordered crowd sourcing sites to work has risen by about 70%. The contents of the work of the crowd worker using a crowd sourcing is including simple tasks like data entry, but also more complicated jobs like development assistance for AI. Therefore, the use of crowd sourcing in Japan is expected to increase in the future.

Figure3 Trends and prospects for crowd sourcing in Japan

Future challenges and measures

Mechanisms to protect crowd workers have not been established because the use of crowd sourcing is such a recent phenomenon. The implementation of regulations on crowd sourcing is often highly problematic because the online platforms are often used by employers and employees in multiple countries.

Most crowd workers are placed in an economically bad situation. However, discussions about crowd workers’ social and economic status are becoming more common, and the movement to improve their working standards is expanding slowly in the U.S. and Europe. In Japan, while specific measures for improving conditions for crowd workers have not been implemented, it is expected that non-regular employees’ working standards will be improved because of the promotion of equal pay for equal jobs in the near future.

Maintaining the current situation, in which Labor Standards laws have not yet been implemented, could lead to an increase in the working poor more and widen pay gap issues. To prevent this, the government should take the lead in improving the current situation of crowd workers. The government should implement measures to improve working condition standards, not only for non-regular employees but also for crowd workers at the same time. Expanding and applying the exception for homeworkers, which is currently implemented, could be one step. To conclude, the researchers and policy-makers should kick off the measures for crowd workers by referring to the example in the U.S and Europe at the earliest.

Crowd work: The rise of unstable work and potential measures to prevent the proliferation of the working poor | ニッセイ基礎研究所